Finc 330 | FINC330 | University of Maryland University College

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PROJECT INSTRUCTIONS BELOW

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FINC 330 Project Descriptions
Research Project Part 1
Due at the end of week 5
This project is closely aligned with the Course Outcomes and Finance Program Objectives.
Completion of this project can be used as part of a portfolio to show potential employers
the student is skilled at performing company valuations and financial statement analysis
and can be included on the student’s resume.

Ratio Analysis

OBJECTIVE
You are to assume you have been recently hired by The Company and have been assigned to a
team that reports to the CEO of THE COMPANY (SELECTED BY INSTRUCTOR). The head
of your team is the CFO who is concerned about THE COMPANY’s current financial
performance and comparison against major competitors in the industry and the impact that may
have on the firm’s stock price. The CFO would like your team to provide insights that will help
them to project future financial performance. Specifically, the primary question to answer is: will
THE COMPANY be financially viable over the next two to three years, and which steps should
be done to improve its financial stability?
THE COMPANY that is to be analyzed for this project is to be a company selected by instructor.
Alternatively, you can request approval of another publicly traded company. This request must
be submitted before the end of the first week of the course. The request must include

identification of the company by ticker symbol and name

a reasonable and appropriate explanation of why you want to examine the alternative
company

the source of the analyst’s report that will be used in the analysis (which must be
submitted to me)

acknowledgement by you that all of the specific elements of the assignment (see below)
will be prepared by you and included in the final research project report
SUGGESTED WEBSITES
www.morningstar.com
– To find the information for your company you need to type the stock
symbol in the
Quotes
window to get into the company’s page.
www.marketwatch.com
-To find the information for your company you need to type the stock
symbol in the
Search
window to get into the company’s page.

www.Finviz.com
–
To find the information for your company you need click on Screener on the
top of the screen, type the stock symbol in the
Ticker
window to get into the company’s page.,
and click on the company in the list.
www.money.cnn.com
-To find the information for your company you need to type the stock
symbol in the
Search
window to get into the company’s page.
www.finance.yahoo.com
– To find the information for your company you need to type the stock
symbol in the
Search
window to get into the company’s page.
www.nyse.com
– Click on Data, then click on Stocks (under Quotes), and type the name of the
company or the stock symbol in the window “Keyword or symbol” to get into the company’s
page.
www.nasdaq.com
– To find the information for your company you need to type the stock symbol
in the
Search
window to get into the company’s page.
Company’s websites
YOUR SPECIFIC ASSIGNMENT
Using the information from the websites the students will develop evaluation of the financial
performance for THE COMPANY (SELECTED BY INSTRUCTOR). (The evaluation portion
will total 85% of the assignment grade)
-1—
Introduction
(3% of the project grade)
–
The paper should begin with a short introduction,
explains the purpose of the paper, and provides an overview of the contents that follow
(one
short
paragraph).
2—
Trend analysis (20% of the project grade)
Analyze the financial trends over the last 5 years of

Sale Growth,

COGS Growth,

Gross Income Growth,

Interest Expense Growth,

Net Income Growth,

Cash & Short Term Investments Growth

Assets – Total – Growth
.
You can find these ratios in the Internet or calculate them. If you use published ratios you
must indicate that and cite their source.

These growth rates are available in
www.marketwatch.com
-To find the information for your
company you need to type the stock symbol in the
Search
window to get into the company’s
page. Click on Financial > Income Statement (or Balance Sheet) > click on View Ratios.
To present your findings, you will create the table(s) and/or graphs.
You can use the bar
graphs provided by
www.marketwatch.com
or create your own ones.
Write about 1-2 pages of the analysis of the financial conditions, its stability, and trends. What
important information does this analysis provide?
-3— Financial ratio analysis. (25% of the project grade)
In this part of the project you will complete ratio analysis of THE COMPANY. Please remember
that you are the financial analyst of THE COMPANY and should prepare the report to be read by
the chairman (CEO) of THE COMPANY. The ratio analysis should be completed from t
he point
of view of THE COMPANY’s the management
.
The chairman of THE COMPANY is especially concerned about the following groups of ratios:

Liquidity (current ratio, quick ratio)

Operating performance ratio (Days of Sales in Inventory, Days of Sales Outstanding,
Days of Payables Outstanding), Receivables Turnover, Inventory Turnover, Fixed Assets
Turnover, Total Assets Turnover)

Profitability ratios (Gross Profit Margin, Operating Profit Margin, Net Profit Margin)

Return on Investment ratios: (ROA, ROE)
These ratios are available on
www.morningstar.com
> Company’s page – under
Financials and under Operating Performance
You can find financial ratios for the company for the last 1-5 years in the Internet or calculate
them. If you use published ratios you must indicate that and cite their source.
a)  Present the ratios as the table(s) in your project. Create graphs for some ratios on your choice
over three years to show trends.
b) Write 2 pages (or more) of analysis of the ratio results that you found. In your analysis you
should answer the following questions:

How liquid is the company?

Is management generating a substantial profit on the company’s assets?

If the management of the company would like to improve the company’s financial
performance, what should the management of THE COMPANY do?
-5-
Evaluate Return on Equity for the company for the last three years using the DuPont
analysis
.
(17
% of the project grade).

You can find these ratios in the Internet or calculate them. If you use published ratios you
must indicate that and cite their source.
a.
Find ROE, Net profit margin (listed as net margin), asset turnover, financial leverage for
the
last three years
for your company. You also may use debt/equity ratio in your
analysis.
Present the ratios as the table(s) in your project.
b.
Find ROE, Net profit margin (listed as net margin), asset turnover, financial leverage for
the
last year
for its major peer competitor. You also may use debt/equity ratio of peer
competitor in your analysis
. Present the ratios as the table(s) in your project.
c.
Has the company’s ROE changed over the last three years? What was the main factor that
influenced this change?
d.
Compare the ratios of you company to the peer competitor. If the management of the
company would like to improve their return on equity, what should the management of
the company do?
Write about 1 page of analysis to answer the questions (c) and (d).
–
6- Develop a specific recommendation, with supporting rationale
, as to whether the assigned
company’s recent trends and results in financial performance is of sufficient financial strength,
will THE COMPANY be financially sustainable over the next two to three years, and which
steps should be done to improve its financial stability? (about 1 page) (
15% of the project
grade).
-7-
Reflection
– the student should write a paragraph in their own words reflecting on
specifically what they learned from the assignment and how they think they could apply what
they learned in the workplace. (5% of the project grade)
PRESENTATION OF PAPER AND WRITING (15%) of the project grade):
-Organization, Format and Presentation of Paper including the Title page, Introduction, Body,
and Summary.
Each section of the paper must begin with sub-headings.  Please use the sub-
headings included in the assignment. Please use double spaced, with one-inch margins, and use
12-point Times New Roman font.
(4% of the project grade)
Use of Tables, Figures and Other Graphics to Summarize and Support Analysis Presented in the
Paper.
All tables and charts should have the numbering system, like “Table 1…”, the title, and
foot/end note to reference the source of the information.
(3% of the project grade)
Logical and Smooth Flowing Transitions and Relationships among Sections of the Written
Report (3% of the project grade)
Research Sources and Significance of Research Information and Data, Use of APA Citation
Methodology (5% of the project grade